Since heading home from the hospital and catching up on the news I had missed, I have formed some opinions on Microsoft's new hardware.

I believe Microsoft was inspired to develop its Surface tablet when it began to notice the large number of people buying external keyboards for the iPad. In fact, external keyboards are the second best-selling iPad accessory behind protective cases. Also, Asus' Transformer has shown that there is interest in a tablet/keyboard combo device for Android, another product that underlines consumer demand.

But what's curious about the Surface tablet is that instead of working with OEMs to create a new category of devices, Microsoft developed it in stealth mode and decided to brand it as a Microsoft product. In fact, it was so secret that its OEM partners were not even told about it until just before it launched. To say that Microsoft's OEM partners are quite angry is an understatement as it puts the company in direct competition with the very partners it leveraged to make Windows the dominant OS it is today.

As a Microsoft product, however, I think Surface will only be marginally successful. Microsoft CEO Steve Ballmer told an audience recently that the company "may sell a few million" of them next year. That's not exactly a stellar endorsement for the success of Surface. It's probably a realistic forecast, though, since Microsoft's only experience in hardware has been the Xbox, which uses completely different sales channels and only minimal support compared with selling and supporting a full PC like Surface.

Still, there is another reason that I think it will only be somewhat successful and that lies in Microsoft's proprietary approach to its design. For the entire history of the PC industry, the critical standards that could be used across all PCs are what made them so successful. Things like PC MCIA, RS 232 printer ports, USB, SD cards slots, Ethernet, Wi-Fi, and other standards allowed third parties to deliver accessories and additional support products for the PC ecosystem.

While the Surface does have USB, Micro SD, Micro video HD 2X2, and Wi-Fi, its other connectors are proprietary, such as the way it connects to the keyboard. Also, the way it is designed does not make it conducive to a lot of third-party support. For example, Apple's 10 Pin connector at the bottom of the iPad is licensable and third-party product developers have made hundreds of collaborative devices, chargers, and docking systems.

But another threat to the Surface's success is that it could meet serious competition from the very OEM partners that Microsoft snubbed. Already, we hear that they see flaws in Microsoft's design, especially with the lack of standard ports that could be supported by a third-party ecosystem and they are working on designs of their own to compete with Microsoft. These PC vendors know how to sell through the channels and, more importantly, have a great infrastructure in place to service and support their versions of a tablet/keyboard combo device.

There is also the big question of whether Surface-like products will ever really catch on with the consumers and business users alike. Apple CEO Tim Cook said they are like marrying a toaster to a refrigerator—sounds like Apple has no plans to produce such a product. Apple's design sense and history of nailing what consumers really want in a tech product should be viewed at the very least as a cautionary tale for those going down the path of tablet/keyboard combo devices.

Another interesting thing to note is the number of people that have adapted to typing on the iPad keyboard built into iOS itself. This is especially true with younger audiences that don't want the burden of carrying an additional keyboard and default instead to the built-in one. Personally, I prefer the Logitech Ultrathin Keyboard cover since I just get can't the hang of typing on the built-in keyboard, but I am old and it probably comes with the territory.

In another bit of troubling news, various financial analysts I have talked to believe that Surface and tablets in general are responsible for the slowdown in laptops sales. This endangers both Intel's big Ultrabook push and the PC vendors becoming more aggressive in pricing to push traditional laptops this fall. Also, the prices for Surface and similar products need to be under $600 to compete, which means that they will not generate a lot of money once they come to market. In fact, I believe margins will be very thin on tablet/keyboard devices.

Time will tell how this all shakes out but I will be surprised if Surface is a smashing success and I think that it and similar products may have a hard time finding the right niche in the market. In the meantime, Microsoft is poised to compete with its customers, which to me is a risky game for anyone to play.

Tim Bajarin is one of the leading analysts working in the technology industry today. He is president of Creative Strategies (www.creativestrategies.com), a research company that produces strategy research reports for 50 to 60 companies annuallya roster that includes semiconductor and PC companies, as well as those in telecommunications, consumer electronics, and media. Customers have included AMD, Apple, Dell, HP, Intel, and Microsoft, among many others. You can e-mail him directly attim@creativestrategies.com.

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About the Author

Tim Bajarin is recognized as one of the leading industry consultants, analysts, and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Comp... See Full Bio

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